NPCI prepares to disrupt credit cards as RuPay-linked UPI payments gain traction

With UPI powering over 90% of digital retail transactions and RuPay’s share of UPI-linked credit card usage rising from 10% to 38%, India’s ecosystem is moving rapidly away from traditional card networks.
| Photo Credit:
Dado Ruvic/Reuters

The National Payments Corporation of India (NPCI), the country’s indigenous payments authority, is preparing to introduce new disruptions to India’s credit landscape following its transformative impact on debit payments via the Unified Payments Interface (UPI).

A Bernstein research analysis indicates, “Having revolutionized debit cards through UPI’s exponential growth, NPCI now aims to redefine credit cards.”

India’s payment infrastructure—driven by UPI, RuPay, and extensive government-supported digital systems—has established an environment conducive to a historic transition from conventional card networks.

Currently, UPI handles more than 90% of retail digital payment transactions by volume, with QR-code merchant acceptance eliminating costly point-of-sale hardware. This shift has progressively reduced debit card reliance, largely supplanted by UPI’s economical, real-time payment framework.

Analysts emphasize that the forthcoming transformation stems from integrating RuPay credit cards with UPI, enabling consumers to access credit through the same ubiquitous QR-based merchant network that popularized UPI.

This integration is projected to significantly enhance credit accessibility, as RuPay’s share in UPI-connected credit card transactions surged from 10% to 38% within a brief period.

Major fintech platforms including PhonePe, Paytm, and Google Pay—already controlling over 90% of consumer UPI transactions collectively—are positioned to capitalize on UPI-enabled credit expansion. These apps could see strengthened user engagement, fresh revenue streams via lending services, reduced reliance on traditional card-network structures, and broader financial service offerings.

As credit-linked UPI adoption grows, India’s fintech sector anticipates heightened innovation and competitive advantages, particularly for widely-used payment apps with extensive reach.

NPCI’s framework demonstrates how a locally-developed payment network—supported by regulatory alignment, government-backed financial inclusion initiatives, and fintech growth—can compete with global card networks while operating more cost-efficiently.

The analysis concludes that physical credit cards might ultimately follow debit cards into obsolescence as India’s digital payment ecosystem continues its rapid evolution.

Published on November 19, 2025